MELCROFT, Pennsylvania (CNN) -- It's a part of the United States that, to some eyes, might look like another country. Appalachia has been called the forgotten America. But amid poverty and hardship, there's also hope and self-reliance.

At a time of prolonged national prosperity, Appalachia is an area where the clanging bells of Wall Street's economic boom are seldom heard. Where some people live in crowded shacks without plumbing, where health care can fall to Third World levels, where roadside garbage often goes uncollected and where unemployment stands at many times the national average of 4.3 percent.

It is here, a region dotted with economically depressed coal-mining towns, where President Clinton sees untapped commercial potential he hopes to unlock with his "new markets" initiatives -- tax credits and loan guarantees for businesses that invest in distressed areas.

But this is a different Appalachia than the one President Lyndon Johnson targeted 35 years ago in a war on poverty that sought to uplift the region's economic and social plight with an unparalleled infusion of tax dollars.

It's generally conceded the war was lost. The approach now is self-reliance and less government intervention. Some examples:

Appalachia:

 The Appalachians, a mountain range in the eastern United States, stretch from northern Alabama and Georgia into New England and up to the Canadian border.

 The Appalachian Trail, a footpath 2,140 miles long, goes through 14 states from northern Georgia to central Maine, running mainly along the ridge of the Appalachian Mountains.

 The regional name Appalachia generally refers to only a portion of that mountainous area, extending from Pennsylvania southward.

Rockcastle County, Kentucky: The Family Life Center, an arm of the Christian Appalachian Project, trains applicants, including welfare recipients, to find and keep a job. In some cases, that means teaching adults the basic skills they never got as children. "This has been my dream all my life," says Shirley Gabbard, 50, "to go to school and learn to read and write."

More advanced training includes computer proficiency. There's also instruction on how to set realistic goals, enhance self-image, balance a checkbook, get along with co-workers. In short, how to take charge of your life.

The staff sees encouraging signs. "We have three young ladies (planning) to open a day-care center," a project none of them would have attempted on their own, says instructor Linville Rose.

Welch County, West Virginia: At a live-in shelter called SAFE (Stop Abusive Family Environments), battered and emotionally scarred women and children are taught to reclaim their lives, be independent and prepare themselves for substantive careers. The maximum stay is two years.

SAFE offers battered women and their children a safe and productive environment

Tammy Faulk, 26 and the mother of an infant son, is among the SAFE residents studying to be a nurse assistant. Her training is about over, and a job is in sight. No longer does she think about committing suicide, which she tried last year. "I've been here for six months, and I've seen a lot of changes," she says. "I'm working toward everything I had hopes of before."

For single mom Susan Lundy, who now works at the shelter, SAFE allowed her to buy a modest home.

SAFE Director Sharon Yates told CNN, "I love what I'm doing. And to see somebody's life changed, that's what it's all about."

Eastern Tennessee: Here, where country music was born and went commercial in 1927, they are embracing the tourist industry. Jim White, one of the founders of the Birthplace of Country Music Alliance Museum in Bristol, expects an economic boost. "I don't think we've seen the tip of the iceberg yet, as far as tourism dollars coming to our region."

Eastern Kentucky: In this area, where 22 percent of the people live below the poverty line, one can find several initiatives aimed at promoting self reliance:

Residents of Bristol, Tennessee, expect an increase in tourism

Pike County: Students completing their final year of osteopathic medicine will soon be dispatched to underserved areas.

Elliott County: Sister Sarah Neale, a Catholic nun, works with the rural poor who've been physically and emotionally violated.

Madison County: Trainees from the Women's Initiative Networking Group (WINGS) have helped launch 24 new businesses, ranging from computer repair to video production.

Floyd County: David Greene founded a nonprofit school that offers regular and vocational education to troubled high school dropouts who want a second chance.

Such grassroots activities make some observers cautiously optimistic about what's happening in Appalachia.

"People are trying to sustain their communities," says Jean Speer, director of the Center for Appalachian Studies. "People have finally decided that their salvation in Appalachia is not coming from the outside."

Eric Stockton of the Appalachian Regional Commission -- a federal-state partnership that seeks to boost economic development in the region -- says the first step toward that goal is homegrown entrepreneurs.

"The second big thrust," he adds, "is ... getting citizenry and (local) government to figure out their own solutions to problems."

Monsignor Ralph Beiting, whose founding of the Christian Appalachian Project coincided with the war on poverty 35 years ago, says the government aid of that era left a bloated bureaucracy that couldn't finish the job it started.

Appalachian poverty

Per Capita Income

Percent of U.S. Average

United States

$23,196

100.0%

Appalachia

19,318

83.3%

1995 figures; source: Appalachian Regional Commission

He sees many of Appalachia's poor choosing increased self-reliance as the solution.

"This dependency on welfare has really bothered so many people," he told CNN. "People want to be independent, not in a selfish way, but in a way that they don't have to depend (on the government) for everything."

Despite the optimism, however, poverty, child abuse and high school dropout rates remain high, Beiting says.

It's obvious Appalachia is a long way from ridding itself of its economic and social handicaps.

The Kistner family lives in a makeshift home in the 'coal patch' of rural Fayette County, Pennsylvania

They live in rural southwestern Pennsylvania's Fayette County, an economically depressed part of the state called the "coal patch," where mines once flourished.

Lennette Kistner, 33, quit school at 16 to get married and has lived in poverty and on welfare all her life. A teen-age mother, she had four children in five years and suffers the fatigue and scars of lupus disease.

Her 36-year-old husband, Clair, is a reformed alcoholic with a history of mental illness.

Among others in their extended eight-member family are a mentally retarded daughter, 15; an emotionally disturbed son, 12; and a daughter, 14, who recently gave birth to a child of her own.

Yet, like many Appalachian families, the Kistners are resilient. While food stamps, Medicaid, Social Security disability checks and welfare provide their primary means of survival, they grow some of their own food.

None of the Kistners has a valid driver's license; they do odd jobs in return for rides to stores and the hospital.

And with their makeshift home now paid for, they hope to use the equity to help finance a nicer house with acreage.

It's a long shot, but Clair Kistner hopes he can pull it off. "My biggest dream is to have a farm for my kids," he told CNN.

Adds Lennette: "We've always stuck together as a family, and I guess we always will."

Correspondent Larry Woods contributed to this report, which was written by Jim Morris.